Chandigarh

StateCommission

CC/104/2019

Mr. H.R. Madan - Complainant(s)

Versus

m/s Emaar MGF land Private Limited - Opp.Party(s)

Devinder Singh Soundh Adv.

18 Nov 2020

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	104 of 2019
Date of Institution	:	07.05.2019
Date of Decision	:	18.11.2020

 

 

 

 

Mr. H. R. Madan, House No.663, Sector 9, Panchkula.

. ...Complainant.

 Versus

1. M/s Emaar MGF Land Pvt. Ltd., SCO No.120-122, First Floor, Sector 17-C, Chandigarh – 160017 through its Managing Director.
2. M/s Emaar MGF Land Pvt. Ltd., ECE House 28, Kasturba Gandhi Marg, New Delhi – 110001 through its Managing Director.

…..Opposite Parties.

 

BEFORE:  JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                  MRS. PADMA PANDEY, MEMBER.

                   MR. RAJESH K. ARYA, MEMBER.

 

Present through Video Conferencing:-    

 

Sh. Devinder Kumar Soundh, Advocate for the complainant.

Sh. Sanjeev Sharma, Advocate for the opposite parties.

 

PER RAJESH  K. ARYA, MEMBER

                   The above captioned complaint has been instituted seeking directions to opposite parties either to handover the physical possession of plot No.524 measuring 300 sq. Yards in ‘Augusta Park’ in Mohali Hills, a project of Emaar MGF Land Pvt. Ltd. Located in Sector 109, SAS Nagar, Mohali, or to refund the amount of Rs.34,46,604/- alongwith interest @10% per annum from the date of respective deposits till the date of refund alongwith compensation of Rs.5 Lakhs, deterrent damages of Rs.1 Lakh & Rs.50,000/- as legal costs. However, it may be stated here that in the written arguments filed, the complainant has specifically prayed for refund of the amount on the ground that the complainant is already about 73 years old who has lost his son and now the said residential plot is worthless to the complainant and if he receive the payment, he may live his rest of life with his dearest and nearest peacefully and comfortably. Total sale consideration of the plot was fixed at Rs.36,19,104/-. It is the case of the complainant that despite the fact that he has paid substantial amount of Rs.34,46,604/- which is more than 90% of the total sale consideration, yet, possession of the said plot was not delivered to him by 03.07.2010 i.e. within a maximum period of 3 years (2 years plus 1 year) from the date of execution of agreement dated 04.07.2007 (Annexure C-6) as envisaged under Clause 8 thereof or even till date.  It was stated that there were no basic amenities at the project site and also the opposite parties failed to obtain completion certificate from the competent authorities. The complainant sent registered letters to the opposite parties on 30.05.2011, 17.06.2011 and 15.07.2011 for issuing NOC and for possession of the plot, in question, but of no avail. He alongwith his son visited their site number of times in the year 2012 to 2014 to know the status of the project and for demarcation of the plot but, the project was just a farce and even no demarcation was there on the site and it was nowhere near completion. Even in March 2015, position was the same as some approval issues were there with the Government authorities. It was further stated that the complainant was shocked to hear from the opposite parties that the booked plot could not be handed over as the opposite parties could not get the requisite clearances from the government. Thereafter, the complainant visited the office of the opposite parties numerous times from the year 2010 till 2019 but he did not hear anything as regard possession from the opposite parties. It was further stated that the plot, in question, was booked by the complainant and his son, who expired on 26.02.2019 due to swine flu. It was further stated that the opposite parties collected huge amount from the complainant and also from the general public without obtaining the pre required permissions from the Government without having any intention to deliver physical possession of the promised plots.

2.                By stating that the aforesaid act and conduct of the opposite parties in not handing over possession of the plot in question, by the committed date or till date or also by not refunding the deposited amounts, amount to deficiency in providing service, negligence and adoption of unfair trade practice, the complainant have filed the present case seeking refund of amount paid alongwith interest, compensation and litigation expenses.

3.                Their claim has been contested by the opposite parties, on number of grounds, inter alia, that in the face of existence of provision to settle disputes between the parties through Arbitration, this Commission has no jurisdiction to entertain this consumer complaint; that the complainant did not fall within the definition of “consumer” as he is a speculator; that the complaint filed is beyond limitation as cause of action arose to the complainant to file the complaint in the year 2010; that time was not the essence of the contract as for any delay in offering possession, stipulated penalty has been provided in the agreement, which safeguarded the interest of the complainant, which will be adjusted in the last payment and that since the project in question has been got registered under the Punjab Real Estate Regulatory Authority, as such, jurisdiction of this Commission is barred to entertain this complaint arising out in respect of the plot, in question, located in the said project and that the complaint be relegated to RERA.

4.                On merits, purchase of the plot in question by the complainant; payments made as mentioned in the complaint; execution of agreement; and that there was delay in offering possession of the plot has not been disputed by the opposite parties. It was further stated that the possession has been delayed on account of reasons beyond the control of the opposite parties. It was further stated that even partial completion for the project has been obtained, which is Annexure R-5. It was further stated that now the project has been registered with Punjab Real Estate Regulatory Authority and as such, the possession was to be handed over by July 2020. It was further stated that the project was launched after getting due and valid permission only from the concerned and respective government departments. It was further stated that for the delay, the Company also offered compensatory clause in the Buyer Agreement and thus, there has been no illegality and unfair trade practice on the part of the opposite parties. It was further stated that the complainants showed their interest earlier in the alternative plot but later on did not make any written or specific confirmation as regards the same. It has been stated that the development of the plot is almost complete and possession will also be offered shortly. Lastly, prayer has been made to dismiss the complaint with costs.

5.                The complainant filed rejoinder, wherein it reiterated all the averments, contained in the complaint, and repudiated those, contained in the written statement of the opposite parties.

6.                 This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence by way of affidavits and also produced numerous documents including the written submissions.

7.                We have heard the contesting parties and have gone through record of the case, including the written submissions, very carefully.

8.                From the pleadings of parties and other material available on the record, following points have emerged for consideration in this    case: -

1. Whether the arbitration clause contained in the agreement, bars the jurisdiction of this Commission?
2. Whether the complainants fall under the definition of consumer?
3. Whether the complaint filed is within limitation?
4. Whether the time was the essence of the agreement?
5. Whether the complaint is maintainable or not?
6. Whether the complainant is bound to take over possession in view of the fact that the same has not been offered or delivered by the opposite parties within the stipulated period or up-to date of filing the present complaint or till date?
7. Whether the complainant is entitled to get refund of the amount deposited and if yes, at what rate of interest?

9.                First of all, coming to the objection raised with regard to jurisdiction of this Commission in the face of existence of Arbitration clause contained in the agreement, it may be stated here that this issue has already been dealt with by the larger Bench of the Hon’ble National Commission in a case titled as Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements between the complainant and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Feeling aggrieved against the said findings, the builder filed Civil Appeal bearing No.23512-23513 of 2017 before the Hon’ble Supreme Court of India, which was dismissed vide order dated 13.02.2018. Even the Review Petition (C) Nos. 2629-2630 of 2018 filed by the builder in Civil Appeal Nos.23512-23513 of 2017 against order dated 13.02.2018, was dismissed by the Hon’ble Supreme Court of India, vide order dated 10.12.2018. As such, objection raised by the opposite parties in this regard stands rejected.

10.               As far as objection taken to the effect that the complainant did not fall within the definition of ‘consumer’, it may be stated here that the objection raised is not supported by any documentary evidence and as such, the onus shifts to the opposite parties to establish that the complainant has purchased the plot, in question, to indulge in ‘purchase and sale of plots’ as was held by the Hon’ble National Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge that onus, hence we hold that the complainant is consumer.

11.               As far as objections raised by the opposite parties, to the effect that this complaint is time barred and the time was not the essence of the agreement between the parties, it may be stated here that the same is devoid of merit, in view of observations made by the Hon’ble National Commission in a case titled as Ansal Housing and Construction Ltd. Vs.  Tulika Gupta & anr., First Appeal No. 545 of 2017, decided on 24 Aug 2017, to the effect that till the time either the possession is handed over to the allottees or the amount paid by them was refunded; there will be a continuing cause of action to file a consumer complaint. Relevant part of the said order is reproduced hereunder:-

“As regards the plea of limitation, ordinarily if the  possession is not given to the allottees, they would have a recurrent cause of action to file the complaint till the time either the possession was given to them or the amount paid by them was refunded.......”

 

12.               This view also finds support from the judgment of Hon’ble Supreme Court of India in case titled as Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal   Shah  and Anr., II 2000 (1) CPC 269=AIR 1999 SC 380 and Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC),  wherein it was held that when possession of the residential units is not offered, there is a continuing cause of action, in favour of the allottee/buyer. Furthermore, since the Company is still utilizing the amount paid by the complainant and has not refunded the same, as such, in that event also, there is a continuing cause of action in his favour, in view of law laid down by the National Commission in KNK Promoters & Developers Versus S.N. Padmini, Revision Petition No. 340 of 2011, decided on 31 Aug 2016 and Saroj Kharbanda Versus Bigjo's Estates Limited, First Appeal No. 986 of 2016, decided on 01 Feb 2018, in which it was held that the builder/opposite party cannot withhold the amount deposited by the allottee and if it is so, there is a continuing cause of action in favour of the allottee, to file a complaint seeking refund of the said amount. Relevant part is reproduced hereunder: -

“On the other hand, the OP builder has also not been able to explain as to why they were keeping and enjoying the money deposited by the complainant all these years. They could have cancelled the allotment made in favour of the complainant and made attempts to return the money deposited in terms of the agreement/understanding between the parties, but they did not do so. Since, the part amount deposited by the complainant has been lying with the OP for all these years, it would not be justified to conclude that the complaint is barred by limitation. This is, therefore a case of continuing cause of action, because the OP builder had no right to forfeit the money deposited by the complainant.”

 

13.               In the present case, the possession, which was to be offered/delivered by the opposite parties complainant by 03.07.2010, has not been offered or delivered to the complainant till date. Under these circumstances, it is held that this complaint is not at all barred by limitation. Even otherwise, on the one hand, the Company is saying that this complaint is barred by time, whereas, in the same breath, it is saying that since time was not the essence of contract, as such, it is entitled for extension of time. In the same breath, both objections taken, which are contrary to each other, taken by the Company, cannot be taken into consideration and are, accordingly, rejected.  

14.               As far as the contention raised by the opposite parties to the effect that since the project, in question, has been got registered under the RERA in January 2019 vide registration letter dated 28.01.2019 (Annexure R-6), as such, jurisdiction of this Commission is barred to entertain this complaint arising out in respect of the plot, in question, located in the said project and that the complaint be relegated to RERA, is concerned, the same does not merit acceptance, in view of the ratio of law laid down by the Hon’ble Supreme Court of India in Civil Appeal No. 3581-3590 of 2020, M/S. Imperia Structures Ltd. Vs. Anil Patni and another, decided on 02.11.2020, wherein it was held that the provisions of RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any consumer complaint. Relevant part of the said order reads as under:-

24. It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.

25. Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force. 26. On plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated in paragraph 22 hereinabove, would stand barred from invoking the jurisdiction of a Civil Court. However, as regards the allottees who can be called “consumers” within the meaning of the CP Act, two questions would arise; a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.

*27. In Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee , it was held by this Court:- “The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. *(See Bharat Bank Ltd. V. Employees and Nahar Industrial Enterprises Ltd. vs. Hong Kong & Shanghai Banking *Corpn . On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint…”

 

15.               In view of above findings, we can safely say that the provisions of the RERA and PAPR Act will not debar the jurisdiction of this Commission in entertaining the complaints filed by a consumer alleging deficiency in providing service, negligence and adoption of unfair trade practice, on the part of the builder/developer. Since, this complaint involves the consumer dispute and the same is maintainable before this Commission, as such, objection taken in this regard by the opposite parties stands rejected.

16.               On merits of the case, the sole question for determination is as to whether the complainant is bound to take over possession in view of the fact that the same has not been offered or delivered by the opposite parties within the stipulated period or up-to date of filing the present complaint or till date.

17.               There is no dispute with regard to the fact that against total sale consideration of Rs.36,41,776.15 ps., the complainant paid an amount of Rs.34,46,604/-  i.e. 95% of the total sale consideration, for the period between September 2006 to 2009, on time, and thus, cleared 100% payment as he qualified for waiver of remaining 5% of the basic sale price, which was to be paid at the time of the possession, to the opposite parties. Despite the fact that it was in a clear-cut manner, committed by the opposite parties, vide Clause 8 of the agreement that possession of the plot will be delivered within a period of 2 years and not beyond 3 years from the date of execution thereof i.e. on or before 03.07.2010 (date of execution of agreement being 04.07.2007), yet, they miserably failed to do so as possession of the plot, in question, was not offered to the complainant on 03.07.2010. What to talk of, admittedly, the possession has still not been offered or delivered by the opposite parties to the complainant as they have clearly admitted in their written statement that the possession has been delayed on account of reasons beyond the control of the opposite parties. The opposite parties have not disputed the inordinate delay in offering possession of the plot, in question, to the complainant. However, without giving any convincing justification of such an inordinate delay; to wriggle out of the situation, it has been simply stated in the written reply that the Company is ready to compensate the complainant for the period of delay.  

18.               At the time of arguments also, we asked the Counsel for opposite parties to apprise this Commission, as to why such a huge delay of more than 10 years took place in offering possession of the plot in question; he was having no answer and said that no refund can be allowed to the complainant as the opposite parties are ready to compensate the complainant for the delay as provided in the Buyer Agreement. On the other hand, Counsel for the complainant contended that since there has been an inordinate delay in the matter and also the basic amenities are still not in existence at the project site, the complainant is not bound to take over possession of the plot and is entitled to seek refund of the amount paid.

19.               It may be stated here that in the written reply filed, not even a single cogent and convincing reason has been assigned by the opposite parties, as to what stopped them, to complete development and construction activities at the project site and deliver possession of the plot, in question, by the stipulated date or till date.

20.               It may be stated here that a similar question as to whether an allottee is obliged to take possession, in case there is a delay in offering the same, fell for determination before the Hon’ble National Commission in Govindan Raghavan Vs. Pioneer Urban Land And Infrastructure Ltd., Consumer Case No. 239 of 2017, decided on 23 Oct 2018, wherein while negating the plea taken by the builder, refund of the amount paid was ordered, by holding as under:-

“16.    The learned counsel for the OP submits that in CC No.239 of 2017, not only the construction of the apartment has already been completed, even the requisite Occupancy Certificate has been obtained on 23.07.2018 and therefore, the complainant should now take possession of the allotted flat instead of insisting upon the refund of the amount paid by him towards the cost of the flat.  The learned counsel for the said complainant states on instructions that the complainant is no more interested in taking possession of the allotted flat and wants refund of the amount paid by him alongwith appropriate compensation.  Considering that the last date for completion of the construction expired about three years before the Occupancy Certificate was obtained, and in fact, it had expired more than one year before this complaint was instituted, the complainant, in my opinion, cannot be compelled to accept possession of the flat at this belated stage.”

 

Feeling aggrieved, against the order dated 23.10.2018, the builder went in Civil Appeal No.12238 of 2018 (Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan), before the Hon’ble Supreme Court, which was dismissed by it vide order dated 02.04.2019, while holding as under:-

“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired…….”

 

Similar view had been expressed by the Hon’ble Supreme Court of India in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. Because in the present case, there is an inordinate delay of more than  10  years in offering possession of the plot in question, which has not been offered till date, as such, in view of settled law that non-delivery of possession of plots/units in a developed project by the promised date, is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid, if we order refund of the amount paid alongwith suitable interest that will meet the ends of justice. The complainant is, therefore, held entitled to get refund of the amount paid alongwith interest, from the respective dates of deposits till realization.

                   In view of above, the contentions raised by Counsel for the opposite parties that the Company is ready to compensate the complainant, for the period of delay in offering possession, does not merit acceptance and is accordingly rejected. 

21.               The question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units/plots, by the stipulated date, fell for determination before the Hon’ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, the Hon’ble Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Under similar circumstances, the Hon`ble National Commission in Anil Kumar Jain & Anr. Vs. M/S. Nexgen Infracon Private Limited (A Mahagun Group Company), Consumer Case No. 1605 of 2018, decided on 23^rd Dec 2019, ordered refund of the amount paid, alongwith interest @12% p.a. As such, it is held that the complainant is entitled to get interest @12% p.a. from the respective dates of deposit on the amount of Rs.34,46,604/-.

22.               For the reasons recorded above, this complaint is partly accepted with costs and the opposite parties, jointly and severally, are directed as under:-

1. To refund the amount of Rs.34,46,604/-  to the complainant, alongwith interest @12% p.a. from the respective dates of deposit onwards, without deducting any TDS, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount of Rs.34,46,604/-  shall carry 3% penal interest i.e. 15% p.a. (12% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
2. To pay compensation for mental agony and harassment caused to the complainant and also litigation expenses, in lumpsum, to the tune of Rs.50,000/-, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry interest @9% p.a. from the date of passing of this order, till realization.

23.               However, it is made clear that, if the complainant has availed loan facility from any banking or financial institution, for making payment of instalments towards the said plot, it will have the first charge of the amount payable, to the extent, the same is due to be paid by the complainant.

24.               Certified Copies of this order be sent to the parties, free of charge.

25.               The file be consigned to Record Room, after completion.

Pronounced

18.11.2020.

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

(PADMA PANDEY)

MEMBER

 

 

(RAJESH  K.  ARYA)

MEMBER

 

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